Question 1: Which of the following best reflects your opinion on the following statement? “The ECB should explicitly state that it will allow inflation to temporarily exceed the 2% target following extended periods of low inflation.”
Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
I agree with the arguments out forward by Madame Lagarde. In addition, the fiscal response to the pandemic can only be maintained for as long as necessary in the knowledge that there is sufficient monetary accommodation, albeit indirectly through PEPP. It’s paramount to avoid raising taxes or tightening monetary policy before the economy recovers fully.
Question 2: What is the best way to (eventually) reduce public deficits and debt?
Answer:
Perpetuities
Confidence level:
Extremely confident
Comment:
Monetary financing need not be inflationary in the current circumstances, so that’s another option I could have chosen if it was available!
As the government can continue to borrow at favourable terms, perpetuities is a very good option. Any attempt to use fiscal policy Even in the future would backfire as it could derail the recovery as households and firms reduce spending in anticipation of future tax hikes or spending cuts. Consols or perpetuities offer the best alternative to monetary financing.
Question 1: How urgently should the UK government address the rise in public debt?
Answer:
Budgetary policy should not be used to address public deficits and debts in the foreseeable future
Confidence level:
Extremely confident
Comment:
Unless the war is over, it is premature to start even planning for debt reduction. The mere talk of taxation or cuts will create lobby groups against current levels of public spending and can derail the war effort. The economy will plunge into depression if the government becomes hesitant to spend during this unprecedented war. Even worse, if health spending is affected, we could be facing a very long war indeed.
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Answer:
Expanded EU budget (with possible borrowing at the EU level)
Confidence level:
Very confident
Comment:
I like the Spanish governments proposal of issuing perpetual bonds to fund the recovery, as it is less problematic politically than corona bonds or direct transfers. The bonds will not increase public debt levels and will to have to be paid off. The fund can support the countries most affected by the pandemic and could also be used to fund public investments that create spillovers across national boundaries e.g. transport infrastructures that are essential in supply chains, and/or research and innovation, green technologies etc
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Answer:
5-10% of GDP
Confidence level:
Very confident
Comment:
Fiscal support should be at least the same size as the expected contraction in GDP (7.5%). I suspect that IMF projections are already taking into account the 5% stimulus package announced. Going beyond that is therefore essential to prevent such a large drop in GDP, prevent unemployment from spiralling out of control and to protect the productive base of affected economies so that supply can respond to demand when the restrictions are lifted.
It is paramount that governments strengthen the capacity of public health systems to deal with a possible second wave of the pandemic in the autumn, without reintroducing new restrictions that will further damage their economies. It is also paramount that governments do not see this as an opportunity to cut public sector wages and salaries, or carry out cuts in other public services. Such short sighted policies could push European economies deeper into recession and will make recovery in 2021 much less likely.
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
Should the ECB Reformulate its Inflation Objective?
Question 1: Which of the following best reflects your opinion on the following statement? “The ECB should explicitly state that it will allow inflation to temporarily exceed the 2% target following extended periods of low inflation.”
COVID-19 and UK Public Finances
Question 2: What is the best way to (eventually) reduce public deficits and debt?
Question 1: How urgently should the UK government address the rise in public debt?
The Eurozone COVID-19 Crisis: EU Policy Options
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Pages